Rising rates stifle mortgage application volume
Rising rates suppressed total mortgage application activity, which decreased 2.6% from one week earlier, according to the Mortgage Bankers Association.
The MBA's Weekly Mortgage Applications Survey for the week ending Jan. 26 showed that the refinance index decreased 3% from the previous week.
The refinance application share decreased to 47.8% from 49.4% the previous week.
The seasonally adjusted purchase index decreased 3% from one week earlier. The unadjusted purchase index increased 15% compared with the previous week and was 10% higher than the same week one year ago.
On an unadjusted basis, the MBA's Market Composite Index was up 12% over the previous week.
Adjustable-rate loan application activity increased to 5.7% from 5.2%, while the share of Federal Housing Administration-guaranteed loans decreased to 10.7% from 11.4% the week prior.
The share of applications for Veterans Affairs-guaranteed loans decreased to 10.1% 10.9% and the U.S. Department of Agriculture/Rural Development share remained unchanged at 0.8%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased 5 basis points to 4.41%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100), the average contract rate increased 3 basis points to 4.34%. For both conforming and jumbo loans, these are the highest rates since March 2017.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased 3 basis points to 4.4%, the highest rate since September 2013, MBA said.
For 15-year fixed-rate mortgages the average rate increased 4 basis points to 3.85%, the highest since April 2011. The average contract interest rate for 5/1 ARMs increased to its highest level since March 2011, 3.79%, from 3.7%.